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Philanthropy and Civil Society: The Clash of Currents

By Tom Watson on December 20, 2006No Comment

Election

Philanthropy and Civil Society: The Clash of Currents
By: Susan Raymond, Ph.D., 12/21/06


There is an irony emerging in philanthropy, and it will grow enormously as wealth changes hands in the coming generational shift in America.  It is an irony that is good neither for public policy nor for civil society.

In our nation there are two expressions of public will.  The first is at the ballot box.  There is, of course, an indirect path from the expression via voting to the ultimate embodiment of public will in public policy.  One makes the assumption that a vote for an individual will be expressed in the policies that are enacted.  But, as all participants in democracy know, that link can be less a hoop of steel than a fine silken thread.  Whether or not public will leads to publicly willed public policy is often hard to tell.

The second expression of public will is voluntarism.  How people voluntarily spend their time on matters of common concern speaks volumes about their priorities.  At the level of community, where large numbers of people in a community voluntarily allocate their time commonly, the measure of their priorities is particularly compelling.  In some fundamental ways, philanthropy is merely the monetization of voluntarism.  Taxes which support public policy are largely involuntary, except as they are amenable to the will of the people at the ballot box strained through the fine mesh of the political process.  Philanthropy, on the other hand, is a direct and voluntary flow of funds from individuals to their priority concerns.  There is little distance in time and few intermediaries at the table.  Philanthropy, at the aggregated community level, expresses community will.

Here is the problem.  Public policy in a civil society, ultimately accountable at the ballot box but separated from public will by time and intermediaries, reacts to or manages problems that affect the public at large.  It does so, at its best, in order to maximize community benefit.  The enactment of those policy decisions, however, can clash with the second expression of public will, the ways in which a community voluntarily expresses its support for or concern over its own institutions as embodied in voluntary private philanthropy.  When these two expressions of will public policy and private philanthropy do not communicate with one another, the result is conflict.  As trillions of dollars begin to change hands in a “transfer of wealth” the potential size of those conflicts is sobering.

Let us now take a case in point.

There is little question that, from a clinical and public finance point of view, New York State has an excess of hospital beds and a poor distribution of certain types of beds.   Many hospitals are struggling economically and many cannot survive the forces of financial change spurred by cost containment. The result is a combination of unmet needs in the midst of excess capacity.   The Commission on Health Care Facilities was established as a nonpartisan panel to review the hospital situation in New York and make recommendations for improvements.  This month, the Commission released its report, recommending a series of community hospital closures, bed reallocation, and downsizing of community facilities.  The purpose of the effort is to rationalize the provision of hospital care in New York and to protect public finance from cost escalation.

Clearly, the recommendations of the Commission reflect a concern of public policy, which itself is a reflection of the will of the people as exercised at the ballot box.

What of the hospitals?  On an annual basis, the hospitals to be closed and those to lose significant numbers of beds receive some $20 million in private voluntary philanthropic contributions.  Let us take one example, 50-bed Dobbs Ferry Community Hospital, for a deeper examination.

In 2005, the Hospital received about $5,000 per bed per year in voluntary cash contributions.  Philanthropic support for the Hospital has quintupled in the last five years.  Indeed, its two-year average for direct public support in the community of Dobbs Ferry is nearly a third again as large as its nearest community nonprofit competitor, and more than double every other nonprofit in Dobbs Ferry.  Furthermore, compared to hospitals of similar size in the state, the Dobbs Ferry Community Hospital scores at the top of the range of average household giving.

The people of the community of Dobbs Ferry appear to have spoken clearly and consistently.  They value their hospital, and the expression of community will is monetized in the value of their private voluntary contributions to it.

What is happening here?  We have two currents of civil society moving across one another.  One reflects the larger, macro-level concerns of public finance as enabled by community will at the level of the ballot box and driven by technical analysis.  The other is the micro-level expression of community will at the level of the personal wallet and driven by the immediacy of community preferences.  Now, in the case of New York’s hospitals, or even the Dobbs Ferry Community Hospital, the conflict is not riveting.  New York’s health care will work through these closings; Dobbs Ferry will not be without healthcare.

But that is not the point.  Both currents are, in fact, part and parcel of a free civil society.  Therefore, conflict is inevitable.  Where conflict is inevitable communication is paramount.  Even more so in the future as the size and role of philanthropy in the nation grow.  When trillions of dollars are moving in the philanthropic currents of communities their confluence with public policy that moves in the opposite direction will create much confusion and not a little resentment at the level of the policy-aggrieved community.  It is time for philanthropy and public policy to speak to one another, consistently and openly. 

Communication will not resolve the inevitable differences and priorities the policy priority for the entirety of a polity will regularly be different from the policy priority for a portion of the polity. But, public policy decision-making must begin to recognize private philanthropy as a legitimate measure of the commitment of community to its own social and economic commons.  That current is real and growing; it will increasingly be ignored only at policy’s peril.   It must talk to communities and their philanthropies not as the object of policy change, but as the partners in making decisions about resources.  Government endeavors such as that of the New York Commission will increasingly need to heed the presence of philanthropy as a measure of community will as a measure, indeed, of civil society itself and acknowledge and communicate with those individuals and institutions who are making direct and voluntary investments in their own institutions.

The result of failing to do so will be an upward spiral of conflict between two fundamental expressions of community will.

The author gratefully acknowledges the research support of CW’s Director, Research, Josh Moore.

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